I’ve been asked to Value newly listed Emami Infrastructure Ltd (EIL) after it’s Price Acrobatics displayed on the first day of Listing,on Wednesday last week!

I needed a ‘Saridon’ at the end of the Interesting and quite revealing Valuation exercise !…there should be a law against the number of companies that a Real Estate Player opens in the Group !…you will understand once you go through this blog

Emami Infrastructure Ltd listed on Wednesday,July 28,2010 and Price swings were crazy…opening at Rs 250 on NSE and then touching heights of Rs 598.80 and lows of Rs 86 and closing at Rs 104.8…closed lower at Rs 101 on BSE…and today it’s Rs 91

On the first day of Listing,there are no Circuit Breakers…so price mischief through volatile swings is easily facilitated…seems Emami Infrastructure too is a prey to this Game…SEBI is planning to investigate Listing Day swings…also have a look at the Bulk deals on that day on BSE (source bse website)

BULK DEALS ON BSE ON THE FIRST DAY OF LISTING OF EMAMI INFRASTRUCTURE LTD

Scrip Code:533218 Date : Wednesday ,July 28,2010

Deal Date

Scrip Code

Scrip Name

Client Name

Deal Type *

Quantity

Price

28/7/2010

533218

EMAMI INFRA

ALIVE CONSULTANTS

B

182804

113.64

28/7/2010

533218

EMAMI INFRA

GENUINE STOCK BROKERS PVT. LTD.

B

512612

112.68

28/7/2010

533218

EMAMI INFRA

SMART EQUITY BROKERS PRIVATE LIMITED

B

389393

118.08

28/7/2010

533218

EMAMI INFRA

CROSSEAS CAPITAL SERVICES PRIVATE LIMITED

B

295142

111.01

28/7/2010

533218

EMAMI INFRA

AKSHI FINANCE PRIVATE LIMITED

B

338590

108.89

28/7/2010

533218

EMAMI INFRA

HOTEL LIBRARY CLUB P LTD

B

128475

122.38

28/7/2010

533218

EMAMI INFRA

MARWADI SHARES AND FINANCE LIMITED

B

205207

117.78

28/7/2010

533218

EMAMI INFRA

OPG SECURITIES P LTD

B

840352

115.37

28/7/2010

533218

EMAMI INFRA

ALIVE CONSULTANTS

S

182804

114.33

28/7/2010

533218

EMAMI INFRA

GENUINE STOCK BROKERS PVT. LTD.

S

512612

112.90

28/7/2010

533218

EMAMI INFRA

SMART EQUITY BROKERS PRIVATE LIMITED

S

389393

118.50

28/7/2010

533218

EMAMI INFRA

CROSSEAS CAPITAL SERVICES PRIVATE LIMITED

S

281888

112.00

28/7/2010

533218

EMAMI INFRA

AKSHI FINANCE PRIVATE LIMITED

S

338590

108.89

28/7/2010

533218

EMAMI INFRA

HOTEL LIBRARY CLUB P LTD

S

128475

119.61

28/7/2010

533218

EMAMI INFRA

MARWADI SHARES AND FINANCE LIMITED

S

205207

117.87

28/7/2010

533218

EMAMI INFRA

OPG SECURITIES P LTD

S

840352

115.69

28/7/2010

533218

EMAMI INFRA

T.ROWE PRICE INTERNATIONAL A/C NEW ASIA FUND

S

300120

97.76

* B – Buy, S – Sell

Except for one,all have squared off at marginal profits…the only genuine sale is by an FII, T Rowe…they were in the Top Ten Shareholders list at the time of the Scheme of Arrangement…..clearly these are synchronised bulk trades to create volumes on the bourse…they do not serve the purpose of efficient price discovery,or genuine,credible and authentic trading……it’s a rampant misuse of the Bulk Trade Window….but why does this misuse continue !?……no prizes for guessing !….a lot of people,part of a nexus, should be brought to book for destroying the sanctity of our markets

Let’s turn to the Valuation of Emami Infrastructure Ltd….but before I do that,let’s revist how Emami took over Zandu in 2008

An Ambitious Emami Group wins a Hostile Bid for Zandu

Remember how in 2008 for Rs 700 crs the Agarwals of Emami Group took over Zandu Pharmaceuticals from the Parikhs (no relations of mine!) in a hostile takeover battle…with more than a little help from the Anand Rathi Group…a lot of Coincidences here that surround the Birla Group….Emami Promoters are ex Birla Group Managers from the 1970s…Anand Rathi too headed the Finance Function in a leading Birla Company….Birla Financial Companies were aggressively buying Zandu in 2007/8 before the takeover bid….A Zandu share of FV Rs 100 was available below Rs 1000….the hostile takeover took it to Rs 20000 !…Friday,Zandu share was quoted at Rs 3100…..but effectively yet near Rs 16000 as a Zandu Shareholder was given 14 free shares of flagship, Emami Ltd of FV Rs 2 for every one share of FV Rs 100 held in Zandu under the Scheme of Arrangement of 2009..last week Emami split the FV from Rs 2 to Rs 1 and is quoted now at Rs 457 for a FV Rs 1 Share read more